European markets were buoyed by Alan Greenspan's positive comments on Thursday and Wall Street's gains.

Frankfurt

Germany's DAX index of leading shares was up 1%, or 44 points to 4845 in morning trade in Frankfurt, at 1124 GMT.

Markets were reassured that unlike the Bank of England's 0.5% cut in interest rates, the Bundesbank refused to yield to pressure from newly-appointed economics minister Oskar Lafontaine when they met on Thursday.

Auto stocks were stronger on the hopes of better exports, after the Deutschmark continued to weaken against the dollar.

Lufthansa led the market gainers, while shares in Puma, the sporting goods manufacturer, dropped by 9% after the company announced a 75% drop in profits.

Paris

It was a similar story in Paris where the Cac-40 index recovered after yesterday's losses. At 1125GMT the index was up 30 points to 3627.

Good sales figures from Renault and Pernod-Ricard helped give the market a tonic.

France Telecom's shares, which have a 12% weighting in the Cac-40 index, continued to weigh on the market, as investors sold their stock after renewed talk that the government was near to floating a convertible bond issue and increase France Telecom's capital.